Daddy’s money, or ‘It’s a good year to die’

Clip Note: This opinion piece was posted March 20, 2006, on my blog, Along the Tracks, which was associated with my news and aggregation website, NorthwestOhio.net. My political leanings have always been libertarian-conservative, but I have called out, with regularity, policy suggestions which I believe fail the tests of a conservative outlook. This is one example.

By Paul A. Miller
NorthwestOhio.net

American society has differed from that of Europe, indeed, from much of the world, from the very beginning.

It’s not the economic system or the individuality or even the liberty – although these are all crucial aspects of American uniqueness.

No, the distinction which has made a difference, and underlies those other special characteristics, is equality.

In the rough colonial towns on the edge of the wilderness, we were forced to live under the notion that one person is of equal value to the next. Of course, it took centuries for Americans to meet that ideal, as Native Americans were shoved aside, Africans were enslaved and the female population was denied the right to vote.

Still, over time, Americans aimed at the ideal and made progress toward an egalitarian society. As a country, we will be at our strongest when every person starts life with equal opportunities and responsibilities.

Unfortunately, in the past few years, a movement has been afoot to incorporate privilege and class distinction into our society, creating economic dukes and duchesses who gain their titles by no right but birth.

I speak of the drive to repeal the estate tax.

I can hear the conservative knives at the grindstone even now. Tax cuts, after all, are a sacred vow shared by all who believe in small government. As a fiscal conservative, I share the disdain for the outrageous tax burden government lays upon the backs of Americans.

Yet, some taxes are worse than others, and some taxes rest on better conservative foundations than others.

The estate tax – or “death tax,” as it is often derided – should be the least offensive of all forms of taxation to a true conservative.

What are conservative principles of freedom? Pick up your Declaration of Independence, and you’ll see them spelled out: Life, liberty and the pursuit of happiness. Resting beneath Jefferson’s elegant words (slightly edited by Ben Franklin, as I recall) is the belief in equality of opportunity.

At death, of course, this life is closed, liberty rides to a new realm and worldly pursuits are at an end.

Here, then, is where a pernicious belief in inherited privilege infects some in the conservative ranks: The wealth left behind “belongs” to the heirs.

While the heirs do indeed hold special claim to the estate of the deceased, this grant is based on tradition in quite the same way title passes to children.

For the vast majority of heirs, the economic value of an estate will not transform their lives. However, for a few, inheritance removes them from the world of egalitarian opportunities and efforts, placing them instead in a privileged class which makes no demands of talent or drive. Special treatment is granted based on the accomplishments of ancestors.

Not a very American sentiment and certainly not a conservative one.

Personally, I prefer to see all taxes reduced, along with government spending. Perhaps a few taxes should indeed be eliminated, just to simplify our lives.

Nonetheless, the “death tax” should be the last to be dropped. In it we have the one tax which does not punish achievement – the achiever is deceased. For those worried about farms or small businesses being stripped from families, the numbers tell otherwise. According to the Center on Budget and Policy Priorities, fewer than 200 family-owned businesses and farms nationwide in 2000 would have faced any estate tax burden at a $3.5 million estate value exemption level. That exemption level will go into effect in 2009, the last year of the present estate tax law. Of those 200 businesses and farms, the number which might have been forced to sell some (not all) of their assets to pay the estate tax would have been in the teens. The American Farm Bureau Federation, when asked by the New York Times, was unable to provide even one example of a family farm ever being sold to pay the estate tax.

Conservatives do not believe in equality of outcomes, but we do believe in equality of opportunity. Repeal of the estate tax flies in the face of this belief, granting special status to the extremely wealthy, not only at the expense of revenues which are made up by higher income, capital gains and other taxes, but at the expense of the egalitarian foundation upon which our nation stands.